UK Childcare Costs Explained: Funding, Free Hours and Financial Support

For many families across the UK, childcare is one of the largest regular household expenses. The good news is that a combination of government-funded hours, tax relief schemes, and benefit support means the amount most families actually pay is significantly lower than the headline rate. The challenge is understanding what you are entitled to and making sure you claim it.

According to the most recent Coram Family and Childcare Survey, the average cost for a part-time nursery place (25 hours per week) for a child under two in Great Britain is over £160 per week. This figure varies enormously by region, with costs in London and the South East substantially higher than the national average. Coram publishes updated figures annually and it is worth checking their latest survey for the most current data.

This guide covers funded hours across England, Scotland, Wales, and Northern Ireland, explains the main financial support schemes, and shows you how to use our calculators to build an accurate picture of your net monthly cost.

The price you pay for childcare is not one-size-fits-all. Several factors combine to determine your actual bill before any funded hours or support schemes are applied.

• Your child's age: Care for babies and young toddlers is typically more expensive because of the higher staff-to-child ratios required by law. Costs often reduce slightly as children grow and ratios change.
• Type of provider:

  • Day nurseries: Structured full-day care. Often among the more expensive options, but usually the most flexible on hours.
  • Childminders: Care in the childminder's own home. Typically more flexible, often slightly cheaper than a nursery for equivalent hours.
  • Nannies: In-home one-to-one care. Usually the most expensive option, but offers the greatest flexibility and is often tax-efficient for higher earners.
  • Pre-schools and playgroups: Sessional care for children aged 2 to 5, mainly term-time only.
  • After-school and holiday clubs: For school-age children needing wrap-around care.
• Where you live: Costs are significantly higher in London and the South East. A nursery place that costs £70 per day in Manchester might cost £120 or more for an equivalent setting in Central London.
• Hours needed: Providers usually charge per day, half day, or hour. Part-time arrangements cost less in total but often have a higher hourly rate than full-time places.

Government-funded childcare hours are the most significant way most families reduce their bill. Entitlements vary by nation, your child's age, and whether you are in paid work. The sections below describe what is currently available as of April 2026.

Beyond funded hours, these schemes can further reduce what you pay. It is worth checking each one, as most families with childcare costs qualify for at least one of them.

We have three calculators that work together to give you a complete picture of your childcare costs and support entitlements. Here is what each one does and when to use it.

A few practical steps taken early can make managing childcare costs considerably less stressful.

• Research providers earlier than you think necessary. Popular nurseries and childminders in many areas have waiting lists of 6 to 12 months. If you wait until you need childcare to start looking, your choice of provider may be limited.
• Apply for funded hours before you need them. In England, apply for your eligibility code around 3 months before the term in which you want to start using funded hours. Codes are usually needed by 31 August for a September start, 30 November for a January start, and 28 February for an April start. Late applications risk losing a full term of funded hours.
• Ask providers for a full written fee schedule. Before committing to a place, request a clear breakdown of the daily rate, what funded hours cover, and all potential additional charges (meals, nappies, activities, late pick-up fees). Compare the net cost rather than the headline daily rate.
• Choose your hours distribution before signing a contract. Decide whether term-time only or stretched funded hours work better for your family before agreeing terms with a provider. Changing arrangement mid-year is often not possible.
• Budget for school-age costs too. Funded hours end when your child starts school, but costs do not. After-school clubs and holiday care are ongoing and can add up to several hundred pounds per month for full-time working parents. Factor these into your longer-term financial planning.
• Review your entitlements each year. As your child gets older their funded hours entitlement may change (for example, moving from 15 to 30 hours at age 3 in England). Your income and circumstances may also change, affecting your eligibility for TFC, UC support, or Child Benefit. An annual review stops you from missing out.

Childcare is a significant cost for most families, but the combination of funded hours, Tax-Free Childcare, and Child Benefit means most families are entitled to meaningful support they may not be fully using. Here is a practical sequence to follow.

1. Work out your gross monthly childcare cost. Use the Childcare Cost Calculator with your actual weekly schedule and your provider's daily or half-day rate to get an accurate figure before any support is applied.
2. Check and apply for your funded hours entitlement. Use the relevant section of this guide for your nation to confirm what you are entitled to. In England, apply through Childcare Choices well before the term starts and set a 3-monthly reminder to reconfirm.
3. Apply for Tax-Free Childcare if you meet the earnings criteria. Check your eligibility on Childcare Choices and open an account if you qualify. Use the Tax-Free Childcare Calculator to see your quarterly saving before applying.
4. Check your Child Benefit entitlement. Use the Child Benefit Calculator to confirm your weekly amount and whether the High Income Child Benefit Charge applies. Even if the charge does apply, understand whether claiming still makes sense for your National Insurance record.
5. Review annually as your child's age changes. Entitlements change at 9 months, 2 years (Scotland), 3 years, and school age. Your income may also change, affecting eligibility for TFC or the HICBC calculation. Set a reminder each April to reassess.